By Myrna M. Velasco
DAVAO CITY – Hedcor, Inc., a subsidiary of Aboitiz Power Corporation, will put up the first 20-megawatt (MW) of its targeted 200MW run-of-river hydropower project next year.
Hedcor President and COO Carlos Aboitiz said the facility will be constructed in Sablan, Benguet in the Cordillera region and the final investment decision (FID) on that venture is eyed early part of 2020.
“We hope to be able to build that over the next 3-4 years, so that’s the next in the pipeline. If everything goes well, we will start construction in September next year and bring it into operations by 2021 to 2022,” he said.
The off-take for the project’s capacity can be offered via the retail electricity supply (RES) system of marketing in the retail competition and open access (RCOA) policy regime of the industry, or the company may opt to join one of the competitive selection processes (CSPs) being carried out by the distribution utilities.
The project funding, said Aboitiz, will largely depend on a number of factors including the topography of the targeted site, the length of connection required for the eventual capacity wheeling of the plant’s generated electricity to the grid, and how big is the weir needed for the hydropower facility.
“It could range from $1.8 million to $3.5 million – it depends on the specifics of the project,” he stressed, noting further that another major consideration will be justifying the economics of the venture based on prevailing market conditions in the restructured electricity sector.
“It’s hard to make economic sense because the prices in the market today are very low – so it’s difficult to build around certain pricing. You also have to be very flexible and you have to adapt around the many uncertainties going on in the industry,” he said.
Aboitiz emphasized the 200MW targeted installations are considerably a “moving target.” These prospective facilities will be located in the Luzon grid.
“Most of the projects are in the Luzon area, primarily because there is a need… because of the growing demand in Luzon,” he said, adding that the Mindanao expansion is not quite on the company’s radar this time because that particular grid is still on capacity surplus.
“Mindanao area is quite a healthy balance – there’s significant amount of reserves, so it’s hard to look for projects here now – because you don’t see the market needing additional capacity in the next five years,” he indicated.
Hedcor currently has 277MW in its portfolio – and the latest completed projects reinforcing its capacity buildup had been the 19MW run-of-river hydropower venture in La Trinidad, Benguet and the 68.8MW Manolo Fortich project in Bukidnon.